Captain D's Completes Seven New Franchise Agreements; Deals To Add 34 New Stores To Chain

Captain D's Seafood announced today that it signed seven new Franchise agreements within the past seven days that will add at least 34 new franchise locations to the chain's system and will further expand the Captain D's brand into the upper Midwest. These agreements complete one of the most successful franchise development years for the seafood chain since its inception.

The deals include:

An agreement with Serve Holdings, LLC, to develop 15 franchise stores in Memphis, TN. The deal also turns over control of 20 company-owned stores in the market to Serve Holdings as of November 3.

• An agreement with Nautical Treasures, LLC, to develop 8 franchise stores in Toledo, OH, a brand new market for Captain D's.
• A development agreement with Seahorse Group, LLC, for three more stores in Atlanta, one of Captain D's biggest markets.
• A four-store development agreement with current Popeye's franchisee David Chunn in Hattiesburg, MS.
• An agreement with Subway franchisee Ashraf Boulos for one store in Terrell, TX, and one store in Rockwall, TX.
• An agreement with Jim and Valerie McClure for one unit in Dahlonega, GA.
• An agreement with current franchisee Tom Sims for one unit in Danville, KY.

"Our long-term goal is to have two-thirds of the company's restaurants operated by franchisees, up from one-third today," says Darin Harris, vice president of franchise development for Captain D's. "These seven deals certainly are a big step forward in delivering on that objective."

The biggest deal involves Serve Holdings, LLC. Captain D's has sold the chain's 20 company-owned stores in the Memphis DMA to the Restaurant management company founded by long-time multi-unit operator, Clarence A. Mitchell, III. As part of the agreement, Mitchell will develop an additional 15 stores over the next six years in the Memphis area, in addition to remodeling all of the existing locations with Captain D's new prototype look over the lifetime of the agreement. In addition to Memphis, the transaction also gives Serve Holdings exclusive expansion rights in parts of Missouri, Kentucky, Illinois and Western Tennessee.

When talking about the decision to sell the Memphis market, Harris adds, "To spur further growth in Memphis, the company felt that a local operator would have greater success in improving our existing stores and developing more locations. Clarence and his partners have the experience to turn Memphis into our premier market. Plus, this sale also allows Captain D's to continue to grow and reinvest in its own future."

Mitchell came aboard Captain D's through the company's minority franchise recruitment program and has over 25 years in the restaurant industry, most recently as the largest shareholder of Phoenix Taco, LLC, a company that developed and operated Taco Bell restaurants in the Charlotte, N.C., market.

"We are very excited to be part of the Captain D's franchisee family. The chain has incredible brand recognition in the area, offers flexible prototype designs for future development and provides us with an excellent opportunity for a high return on our investment. By combining the strength of the Captain D's system with our expertise in the industry, we felt this was a Franchise Opportunity that we just couldn't pass up," says Mitchell.

In addition to Mitchell, Serve Holdings consists of Robb Hunter, a 25-year industry veteran who helped develop the relationship with Captain D's; Noble Benefield, who has 20 years experience in community economic development and strategic planning; and 24-year industry veteran Dwayne Heard, who will help with the company's strategic and community development.

The Captain Sets New Course for Toledo

The second biggest deal will introduce the Captain D's brand to consumers in Toledo, Ohio for the first time. The company announced it has reached an eight-store development deal in Toledo with Nautical Treasures, LLC.

"In doing our research of consumers in the area, we found that Toledo is very similar to some our largest and most successful markets. That was a big factor in our decision to actively seek a franchisee in the Toledo area," says Harris. "We feel this consumer base will help Nautical Treasures be successful with the Captain D's system right from the beginning."

Nautical Treasures is led by Paul Hubbard, a successful Church's Chicken franchisee in the Toledo market. Hubbard's investment group also includes insurance agency owner Vincent Davis, real estate developer Marcus Newbern and Jackie Oliver, president of Toledo's Arena of Life Job Readiness and Training program.

"By offering a dining experience that focuses on hospitality, something unique in the quick-service restaurant industry, the Captain D's system will allow us to succeed in a market where we think we can fill a niche to a customer base that is underserved," says new Captain D's franchisee Paul Hubbard. "Captain D's is a very attractive franchise opportunity, and we are excited to be a part of the chain's major push into the upper Midwest."

Success Spurs Growth

Record sales growth over the past two years has helped spur the aggressive franchise development and growth for Captain D's. In addition, the new Captain D's prototype concepts, which deliver significant savings on building, equipment, construction and real estate costs, will also continue to be a key factor in the company's future growth.